Archive for July, 2015

The new regime to crack down on offshore evaders, which HM Revenue and Customs (HMRC) will consult on from 16 July, includes:

a new criminal offence for offshore evasion – so in the worst cases it’s no longer possible to plead ignorance in an attempt to avoid criminal prosecution

a new criminal offence for corporates who fail to prevent tax evasion or the facilitation of tax evasion on their watch

increasing the financial penalties faced by evaders – including, for the first time, linking a penalty to the value of the asset hidden offshore

new civil penalties on those who facilitate evasion so they will face the same penalty as the tax evader

publicly naming both evaders and those who enable evasion

Speaking at HMRC’s Stakeholder Conference in London, Financial Secretary to the Treasury, David Gauke, said:

“Time’s up for people who don’t pay their fair share of tax by hiding their money offshore. People, who evade tax, facilitate or turn a blind eye to tax evasion will now face powerful criminal and civil sanctions under our tough new regime.

We’ve already seen over 90 countries across the world sign up to automatically exchange information on taxpayers. This, together with our new sanctions, will mean there is nowhere left to hide for offshore tax evaders.”

In the last few years there has been huge progress in tackling offshore tax evasion. HMRC has already collected over £2 billion from previously undisclosed offshore income through agreements with Switzerland, Liechtenstein and the Channel Islands. As announced in the March 2015 Budget, these offshore disclosure agreements will close early (31 December 2015) and be replaced by a tougher last chance facility ahead of the automatic exchange of tax information with over 90 countries, including tax havens, from 2017.

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The Small Business, Enterprise and Employment Act has now received Royal Assent and is expected to be implemented to the timescales set out below.

The measures that affect companies aim to:

reduce red tape whilst increasing the quality of information on the public register

enhance transparency and ensure the UK is seen as a trusted and fair place to do business

All companies will be affected by at least some changes, as the measures will change legal requirements on companies, including what they file with Companies House – which will impact companies’ systems and processes.

It is currently expected that changes will be implemented in three stages – those with the highest impact being delivered in the final stage. Changes to the implementation schedule may still happen during and following the passage of associated secondary legislation through Parliament.

26 May 2015 – Bearer shares

Share warrants to bearer (known as ‘bearer shares’) were abolished. Any existing share warrants will need to be surrendered within 9 months

October 2015 –

Date of birth

Partial suppression of date of birth on the public register: suppressing the day element for directors and People with significant control (PSC).

Accelerated strike-off –

The time it takes to strike companies off the register will be reduced.

Statement of truth

Replacement of the ‘consent to act’ procedure. When a new director is appointed on the company record, the company files a ‘statement of truth’ confirming that the person has consented to act as a director. This will be incorporated into the filing and will not require a separate statement. See also: the new director disputes procedure.

December 2015

Director disputes

A simpler way to get falsely appointed directors’ details removed from the register. As part of this, Companies House will write to all newly appointed directors to make them aware that their appointment has been filed on the public register and explain their statutory general duties.

Registered office disputes

A new process to provide a remedy where a company is using an address for its registered office but never had authorisation.

January 2016

People with significant control (PSC)

Companies will need to keep a register of people with significant control (‘PSC register’) from this point, in preparation for the need to file this information at Companies House from April 2016.

April 2016

Check and confirm

A requirement to ‘check and confirm’ the company information and notify changes if necessary at least once every 12 months. This will replace the current obligation to file an annual return.

People with significant control (PSC)

Companies will need to keep a ‘PSC register’. This information will be filed at Companies House on incorporation and updated at ‘check and confirm’.

Additional information

Companies will be able to deliver certain categories of optional information to the registrar.

Company registers

Private companies will be able to opt to keep certain information on the public register only, instead of statutory registers. This will apply to the registers of members, directors, secretaries, directors’ residential addresses and the PSC register.

Directors misconduct

The disqualified directors’ regime will be updated and strengthened.

Statement of capital

Simplification of the statement of capital and consistency throughout the Act.

October 2016

Corporate directors

A prohibition on appointing corporate directors will be introduced with some limited exceptions. Any company with an existing corporate director will need to take action, to either explain how they meet the conditions for an exception or give notice to the registrar that the person has ceased to be a director.

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On 17 July 2015 HMRC published a consultation document that outlines the changes to the way tax relief will be given for replacement of furnishings in let residential properties.

The present wear and tear allowance (10% of rents) has a number of inconsistencies:

The allowance can be claimed even where the landlord incurs no actual replacement costs.

The allowance is not available to landlords who let part furnished and unfurnished property.

The allowance is restricted to 10% of rents even when actual replacement costs are higher.

To remedy these points HMRC are considering the following changes from April 2016. The following notes are reproduced from their consultation document:

Scope of the new replacement furniture relief

2.3 The relief will apply to landlords of unfurnished, part furnished and furnished properties. The relief will not apply to ‘furnished holiday letting’ businesses (FHLs) and letting of commercial properties, because these businesses receive relief through the Capital Allowances regime.

2.4 The new replacement furniture relief will only apply to the replacement of furnishings. The initial cost of furnishing a property would not be included.

2.5 Under the new replacement furniture relief landlords of all non-FHL residential dwelling houses will be able to claim a deduction for the capital cost of replacing furniture, furnishings, appliances and kitchenware provided for the tenant’s use in the dwelling house, such as:

movable furniture or furnishings, such as beds or suites,

televisions,

fridges and freezers,

carpets and floor-coverings,

curtains,

linen,

crockery or cutlery,

beds and other furniture

2.6 We believe that limiting the scope of the allowance to items that are provided for the tenant’s use in the dwelling house that is being let removes any opportunity to claim the cost of larger items used for the purpose of the property rental business, for example, cars.

2.7 Fixtures integral to the building that are not normally removed by the owner if the property was sold would not be included because the replacement cost of these would, as now, be a deductible expense as a repair to the property itself.

Fixtures include items such as:

baths,

washbasins,

toilets,

boilers,

fitted kitchen units

2.8 Landlords will no longer need to be concerned with whether the item being replaced is a fixture (and therefore a repair to the property) or not. In either case, the cost can be deducted from their rental income to arrive at the profits of their property rental business.

2.9 Landlords will no longer need to decide whether their property is sufficiently furnished to claim the new replacement furniture relief, as they had to when claiming the Wear and Tear Allowance. This is because the new relief will apply to all landlords of residential dwelling houses, no matter what the level of furnishing.

The consultation will run from 17 July to 9 October 2015. We would be happy to forward to HMRC any ideas that landlord readers may have regarding this issue.

The government has published more information about the proposed changes to their tax-free childcare scheme. Here are the top ten things to know about the scheme…

1. You’ll be able to open an online account

You’ll be able to open an online account, which you can pay into to cover the cost of childcare with a registered provider. This will be done through the government website, GOV.UK. Tax-Free Childcare will be launched from early 2017.

2. For every 80p you or someone else pays in, the government will top up an extra 20p

This is equivalent of the tax most people pay – 20% – which gives the scheme its name, ‘tax-free’. The government will top up the account with 20% of childcare costs up to a total of £10,000 – the equivalent of up to £2,000 support per child per year (or £4,000 for disabled children).

3. The scheme will be available for children up to the age of 12

It will also be available for children with disabilities up to the age of 17, as their childcare costs can stay high throughout their teenage years.

4. To qualify, parents will have to be in work, earning just over an average of £50 a week and not more than £150,000 per year

The scheme is designed to be flexible for parents if, for example, they want to get back to work after the birth of a child or work part-time.

5. Any eligible working family can use the Tax-Free Childcare scheme – it doesn’t rely on employers offering it

Tax-Free Childcare doesn’t rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare. Any working family can use Tax-Free Childcare, provided they meet the eligibility requirements.

6. The scheme will also be available for parents who are self-employed

Self-employed parents will be able to get support with childcare costs in Tax-Free Childcare, unlike the current scheme (Employer-Supported Childcare) which is not available to self-employed parents. To support newly self-employed parents, the government is introducing a ‘start-up’ period. During this, self-employed parents won’t have to earn the minimum income level.

The scheme will also be available to parents on paid sick leave and paid and unpaid statutory maternity, paternity and adoption leave.

7. If you currently receive Employer-Supported Childcare then you can continue to do so

You do not have to switch to Tax-Free Childcare if you do not wish to. Employer-Supported Childcare will continue to run. Parents won’t be able to register for Employer-Supported Childcare after Tax-Free Childcare is introduced, but those already registered by this date will be able to continue using it for as long as their employer offers it. However, Tax-Free Childcare will be open to more than twice as many parents as Employer-Supported Childcare.

Employers’ workplace nurseries won’t be affected by the introduction of Tax-Free Childcare.

8. Parents and others can pay money into their childcare account as and when they like

This gives you the flexibility to pay in more in some months, and less at other times. This means you can build up a balance in your account to use at times when you need more childcare than usual, for example, over the summer holidays.

It’s also not just the parents who can pay into the account – if grandparents, other family members or employers want to pay in, then they can.

9. The process will be as simple as possible for parents

The process will be light-touch and as easy as possible for you. For example, you’ll re-confirm your circumstances every three months via a simple online process; and there will be a simple log-in service where parents can view accounts for all of their children at once.

10. You’ll be able to withdraw money from the account if you want to

If your circumstances change or you no longer want to pay into the account, then you’ll be able to withdraw the money you have built up. If you do, the government will withdraw its corresponding contribution.

More information will become available ahead of the scheme being introduced so parents making childcare decisions are able to consider all their options.

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Four London companies involved in selling “miracle” software guaranteed to make investors money trading on the London Stock Exchange, have been ordered into liquidation in the High Court on grounds of public interest following an investigation by the Insolvency Service.

The court heard how Direct Technologies Limited, D Corporation Ltd, Stock Market Charting Programs and Data Specialists Limited and On Demand Sales Consultants Limited raised at least £1m from the public who were duped into buying the software by false claims including those in fake testimonials, false online articles and in purported online magazines claiming to be an award winner alongside various global financial institutions such as a worldwide bank. It was also claimed and that their ‘DTL Direct Trader System’ incorporated:

10 years of extensive past trading data on over 125,000 stocks

the ability to apply 251 internationally recognised charting formulae

the ability to download daily close of market data on all stocks listed on the London Stock Exchange

the application of more than three billion calculations each day to suit the user’s trading requirement

alerts for both profit taking and to stop loss situations

enable the user to make comprehensive trading decisions in only minutes each day

built in accounting package

Numerous related websites were identified by the investigation including http://dtl.info which had an “expert review page” on how to trade and make money and to become part of its “trading family”.

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